Future Forum: Guilt, Innocence, and the Death Penalty 
HOUSTON LAW
HOUSTON LAW
Three of the nation's largest law firms are in Houston. They have kept their awesome power, their pervasive influence, and their closed societies out of the public eye. Until now.
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This informal procedure came roaring out into the open after the Bank Holding Company Act was amended in 1970 to permit, in effect, the development of bank holding companies. More and more "downtown" Texas banks are acquiring direct control of community banks through this device, which enables them to dominate numerous smaller institutions without running afoul of the letter of the constitution. There are now twenty multibank holding companies in the state with 122 subsidiaries. They control almost 40 per cent of the total deposits. Two of the top four are First City Bancorporation of Texas and Southwest Bancshares. The lead bank in the former is Houston's First City Nation; in the latter, Bank of the Southwest. Even as this new technique flourishes, however, the quest for bank charters continues.
A bank charter is a very valuable piece of paper. "It's the next best thing to a Coors beer franchise," one lawyer quips. Charters are adjudged to be so valuable, in fact, that they are granted not by a single individual, but by the three-man State Banking Board, one member of which is called the Banking Commissioner and is appointed by the State Finance Commission. The second member is appointed by the governor for a two-year term, and the third is the State Treasurer himself. A majority vote is sufficient to award a charter. And a majority of the Board is, of course, composed of one elected official and one direct appointee of an elected official, both of whom have been required to mount expensive statewide campaigns every two years.
The cooperation of the big law firms has traditionally been central to the success of gubernatorial candidates and Treasllrer Jesse James. A disillusioned former member of the Banking Board sums up the situation thusly: "Millions of dollars in state funds are lying around in banks at very low interest rates. James has the authority to put the state's money pretty much where he pleases, and a lot of it winds up in Houston, at banks associated with law firms that have helped him stay in office. I'm not suggesting there's been any wrongdoing, but I am suggesting that they [the big Houston firms] understand his problem, and he understands theirs." A big transfusion of state money that can be invested at a profit is, of course, a very useful thing for a bank to have.
Lately the economic importance of the Big Three, especially Vinson Elkins, has been showing definite signs of going international, in a way that has very little to do with banks. The American oil industry, centered in Houston, is not without its influence in the Middle East. Most of the big companies already rely on their lawyers for advice that often transcends the merely technical. If the energy shortage worsens, American policy in that ticklish, oil-rich corner of the world may be affected even more by the judgments of oil men and their lawyers. Firms in New York have for decades influenced the development of American foreign policy, sending partners to counsel presidents and even to serve as Secretaries and Undersecretaries of State. Now it seems to be Houston's turn.
There is another little-noticed basis for the big firms' power. They are enduring institutions. A partner at Vinson Elkins reflected this when he remarked, "If you are going into Texas politics, you can assume that VE will be there throughout your career"—adding as an afterthought, "for good or ill, of course."
In a young city like Houston, their age and apparent permanence stands out sharply from the surrounding landscape. In one very real sense they are more powerful than their clients. A lawyer in government service muses on the relationship between Baker & Botts and their pollution-troubled client, Champion Paper. "They've been around longer than Champion Paper and they'll be here when Champion Paper is gone," he says. "The judges on the bench are there because of Baker & Botts, not because of Champion Paper. Whatever happens B&B will still be here: it's just like the government itself. They're going to suffer when their clients suffer, but they're going to bounce back."
The examples could be multiplied endlessly, but the message is the same. The big firms abide while other things change.
What the Future Holds
WHERE ARE THE BIG FIRMS headed? Despite their apparent immutability, they are actually at the threshold of a potentially dangerous transition. Control is passing inexorably from an older generation of generalists who had diverse knowledge of the law, to younger specialists who have spent their professional lives in one narrow "section" of their huge firms. "There is a generation of lawyers coming up who cannot try a lawsuit or set up a small corporation," says a worried freshman associate at a Big Three firm. The fear is that such men may make mistakes their seniors would never have committed because no one will be around to see the overall picture. Whatever may happen, it is clear that the trend toward specialization makes big firm lawyers even more dependent on their institutions, more than ever unable to leave if they are dissatisfied. A lawyer who does nothing but write pension plans is eventually trapped by his own expertise.
The big firms long ago reached a size where the day-to-day demands of managing their affairs became a full-time job for one or more partners. The relentless inroads of bureaucracy continue. Many lawyers who have left to set up practice on their own did so because they felt the management techniques placed an unacceptable barrier between them and their clients. "Time sheets, billing, all the mechanical details began to dominate," said one emigrant who gave up a successful partnership at a Big Six firm. "I kept sending the stuff back, or 'forgetting' to do it, and they put up with my idiosyncracies because I brought in a hell of a lot of money every year. But that's the only reason I got away with it. Maybe they have to be that formalistic, but there's nothing in a time sheet that reflects the quality of the work you do. After a while you fall into the trap of working for your firm instead of your client."
A great lawyer has to have a certain individualistic spirit; the giants of the profession are not technicians. But the big firms put no premium on that quality. Those of their senior partners who have it, began their careers when the firms were still small. If the big firms expect to see it 20 years from now, they will have to pursue it by conscious choice.
As yet, however, they show every indication of moving in the opposite direction. Exhibiting the abundant caution of men who have already got what they want and are determined to keep it, their instinct is to play things safe. The really exotic corporate finance creativity lately, for example, came out of Wynne, Jaffe & Tinsley, a Dallas firm that represented James Ling in his conglomerate sorcery. Could it happen in Houston? Probably not; the tendency is not to be terribly bold. An inventive young lawyer who left one of the Big Three recalls an incident that helped him make up his mind: "We had a client who did business on the Ship Channel. He was worried to death about a proposed new Treasury Regulation that would have required him to report under-the-table payments to captains of foreign vessels—something that was pretty standard in his business. They were kickbacks, really. He didn't mind reporting them because they were deductible anyway. But the captains, who weren't reporting them as income, didn't want the government to have any record of them. Our client knew that his competitors would just ignore the Regulation, so that if it were adopted he would lose all his customers because the captains would just deal with his competitors and not with him.
"He was an honest man, and he was about to lose his shirt. So I went up to Washington and testified at a hearing in opposition to the Regulation. I must have been persuasive, because they didn't adopt it. After I got back I told the head of my section what I'd done. I thought he'd be delighted. Instead he was alarmed, and he told me in a stony tone, 'We do not testify on behalf of, or in opposition to, legislative matters, without the firm's approval.' What he meant was, 'If you go around changing the law to help one of our clients, you may hurt another, bigger client.' But if the firm had said, no, don't testify, where would that have left my client and me?"
That eternal incubus of the big firms, conflict of interest, subtly depresses their lawyers' creativity and sometimes stifles the free-swinging battling for the client's interest that all lawyers like to believe is their stock in trade.
For all their far-reaching involvement in the political and economic life of Texas, however, the big Houston firms are strangely insular places. Their power paradoxically isolates them from the society they oversee. They inhabit a curious high-rise world, peopled by men of undoubted power whose influence they share and sometimes even create, but disquietingly detached from the human consequences of the decisions they. make. An individual who eventually will be affected by something they do may be strolling along Main Street 20 stories below, blithely unaware that his future is being determined in some small particular by a lawyer intent on "the most intriguing legal problem imaginable," to whom he is a negligible abstraction. It happens all the time. The big firms take justifiable pride in their ability to resolve the most intractable legal problems and keep the engines of the Texas economy running smoothly for their clients. One looks in vain for a complementary sense of awe at the power they hold over other men's lives.
"They are law machines, my friend," said the trial lawyer who went on to praise them for being the finest concentration of legal talent in the country. He felt, quite rightly, that their ultimate justification lay in that fact. By their own professional lights, there is nothing wrong in siphoning off the best intellectual talent they can find and reshaping it into men whose first loyalty is to the wellbeing of the institution for which they work, rather than to the society of which they are citizens. If the firm's interest ever conflicted with the good of society, they tell themselves, we would of course defend the latter; but such is their perception of society's needs that that day never comes. And so the big Houston firms feel no sense of urgency to offer leadership in the reform of law, to improve the quality of the judiciary, or to elevate the tone of public life.
The source of the malaise is politics, and their inability to reach a reconciliation with it which they can regard as suitably professional. These thoughts were on the mind of a lawyer at one of the Big Three.
"What is a lawyer?" he asked. "Is he a professional man, an officer of the court? Or is he a tradesman who has mastered a lucrative craft? What the hell is a lawyer? Traditionally a professional man was respected because he was not just 'in it for the money'; he was a leader in the community and he took time away from his moneymaking to do it.
"Now, to a rather blatant degree, lawyers have become the tools of the propertied class. Instead of lawyers being the best read and wisest people in the community, they've become technocrats. Since you don't want to alienate your clients, you begin to think like them and act like them.
"Politics makes very cautious people out of us. When I think of the leadership that is lost to the community when lawyers are inhibited by these things, I become very discouraged indeed. We have a lot more to offer than we give, and we are the ones who are tying ourselves down."
The clients of the big Houston firms gain excellence, of course; but the loss to the rest of us is considerable. 
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